Sir Philip Green said on Tuesday that he had agreed to make a personal contribution of up to £363 million to plug the pensions black hole left when BHS collapsed last year.
Around 11,000 people lost their jobs after the company went into administration in April, putting the value of 20,000 former employees' pensions in jeopardy.
In a statement released on Tuesday, Green said: "I have today made a voluntary contribution of up to £363m to enable the trustees of the BHS Pension schemes to achieve a significantly better outcome than the schemes entering the Pension Protection Fund ('PPF'), which was the goal from the outset."
MPs had called for the billionaire to lose his knighthood over his handling of the sale of BHS, completed in 2015, for just £1.
The tycoon faced a grilling by MPs investigating the collapse of the 88-year-old business and its sale to little-known businessman Dominic Chappell, who had previously been bankrupted three times and was former racing driver with limited retail experience.
In a searing report published in July, MPs accused Green of not investing in the company and “systemically extracting” hundreds of millions of pounds from it, enriching himself and his family and leaving a pension scheme deficit of millions of pounds. Green has always vehemently denied the accusations.
The report said Green had a “moral duty” to financially contribute to a fund for pensioners, who risked facing a reduced payout from the pensions lifeboat following the collapse of the business.
Ahead of Tuesday's announcement, Green had been in negotiations with the pensions regulator, which launched "enforcement action" to seek "redress" for the pension deficit in November after it had failed to be offered what it said was a "sufficiently credible and comprehensive offer".
It launched a "complex investigation" into the issue in 2015. Enforcement action continues in respect of Dominic Chappell and his company, Retail Acquisitions Limited, the pensions regulator said.
Frank Field, the MP who chaired the inquiry into the collapse of the retailer, welcomed the announcement of Green's contribution.
He said: "I very much welcome this out-of-court settlement which is an important milestone in gaining the justice for BHS pensioners and former workers that we have been pushing for since beginning our inquiry into the downfall of BHS."
This is a breaking news story. Follow BuzzFeed News on Twitter for updates.